Question:
What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 3% simple interest?
Correct Answer
$4248
Solution And Explanation
Solution
Given,
Principal (P) = $3600
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3600 × 3% × 6
= $3600 ×3/100 × 6
= 3600 × 3 × 6/100
= 10800 × 6/100
= 64800/100
= $648
Thus, Simple Interest = $648
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $648
= $4248
Thus, Amount to be paid = $4248 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3600
Rate of Simple Interest (SI) or (R) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3600 + ($3600 × 3% × 6)
= $3600 + ($3600 ×3/100 × 6)
= $3600 + (3600 × 3 × 6/100)
= $3600 + (10800 × 6/100)
= $3600 + (64800/100)
= $3600 + $648 = $4248
Thus, Amount (A) to be paid = $4248 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3600, the simple interest in 1 year
= 3/100 × 3600
= 3 × 3600/100
= 10800/100 = $108
Thus, simple interest for 1 year = $108
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $108 × 6 = $648
Thus, Simple Interest (SI) = $648
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3600 + $648
= $4248
Thus, Amount to be paid = $4248 Answer
Similar Questions
(1) What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?
(2) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(3) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 4% simple interest?
(4) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.
(6) What amount will be due after 2 years if James borrowed a sum of $3000 at a 6% simple interest?
(7) Daniel took a loan of $6200 at the rate of 7% simple interest per annum. If he paid an amount of $10540 to clear the loan, then find the time period of the loan.
(8) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(9) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if David borrowed a sum of $3400 at 9% simple interest for 4 years.